Blue Chips Fall 81 Points

Stocks dropped for the second day in a row in the wake of lackluster earnings reports.

Technology and consumer stocks led the market's decline following a basket of lackluster earnings reports. Chris Dieterich reports.

The Dow Jones Industrial Average fell 81.45 points, or 0.6%, to 14537.14. The Standard & Poor's 500-stock index slid 10.4 points, or 0.7%, to 1541.61, its lowest close in six weeks. The Nasdaq Composite Index sank 38.31 points, or 1.2%, to 3166.36.

Stocks have seen big swings this week, alternating between gains and losses, starting with Monday's 266-point decline, the Dow's biggest of the year. Tuesday's rebound was nearly washed away by Wednesday's 138-point drop for the blue chips. Should the S&P 500's 3% slide this week hold, it would be the steepest since June 2012.

"It's been pretty violent this week, and people are on kind of on edge," said Frank Ingarra, head trader at NorthCoast Asset Management. "There was a feeling of, 'let's see how earnings pan out,' but they've been kind of lackluster to not exciting."

In the Market

First-quarter earnings growth for 82 of the S&P 500's companies had declined 0.4% through Thursday morning, according to FactSet, on pace to mark the second year-over-year decline in earnings in the past three quarters. Meanwhile, corporate revenue is expected to rise at a slower clip this quarter than a year ago, according to S&P Capital IQ.

"The revenue side of the equation looks challenged on the whole," said Bill Stone, chief investment strategist at PNC Asset Management Group. "That's a testament, unfortunately, to a global economy that continues to struggle."

Technology, consumer-discretionary and health-care sectors each slumped more than 1%. The financial sector also was weak after Morgan Stanley,MS-1.17% which fell $1.16, or 5.4%, to $20.31, reported disappointing bond-trading results and sales that missed consensus forecasts.

UnitedHealth GroupUNH0.70% slumped 2.34, or 3.8%, 59.69. The insurer's first-quarter earnings edged ahead of Wall Street's expectations, but revenue was lower than expected. The company also lowered its full-year revenue estimate by up to $2 billion.

Telecommunications stocks were a bright spot after Dow component Verizon Communications,VZ0.26% which added 1.37, or 2.8%, to 50.91, posted first-quarter earnings that topped analyst estimates, though revenue came in shy of analyst views.

﻿UNH0.70%On the data front, U.S. workers applying for jobless benefits rose for the fourth time in five weeks, the Labor Department said. Initial jobless claims, an indication of layoffs, increased by 4,000 to a seasonally adjusted 352,000 in the most recent week, slightly more than forecast.

Business conditions for mid-Atlantic manufacturers remain barely positive this month, as the Federal Reserve Bank of Philadelphia's index of general business activity slowed in April from March. Separately, an index of leading economic indicators posted an unexpected fall in March, as consumers turned gloomy on the economic outlook.

Investors have said that optimism about the pace of economic growth has diminished over the past month. After strong starts to each of the past three years, economic conditions have consistently weakened in the spring.

"A month ago, I thought that we might have escaped the spring swoon. Now, I'm thinking we haven't," said Kim Forrest, senior equity analyst at Fort Pitt Capital Group, which manages about $1.3 billion. Ms. Forrest said her firm is looking for stock drops as opportunities to buy shares in sectors that have lagged behind this year's rally, like industrials and technology.

AppleAAPL-0.87% continued its slide, down 10.75, or 2.7%, 392.05, closing under 400 for the first time since 2011.

A number of technology companies that reported results after the closing bell were caught in the market's down draft. International Business Machines,IBM0.64% which fell 2.52, or 1.2%, to 207.15, said its first-quarter earnings fell 1.1% amid declines in hardware and services sales. Shares slid in after-hours trading.

Microsoft,MSFT-0.38% down four cents, or 0.1%, to 28.79, advanced in after-hours trading after recording higher sales in its Windows division. Google said its first-quarter profit improved 16% as the search company saw strong revenue growth in its core advertising business. Shares dropped 16.65, or 2.1%, to 765.91, then ticked lower after hours.

In other earnings news, American ExpressAXP-0.08% edged up 91 cents, or 1.4%, 65.04, after its first-quarter revenue rose less than expected, offsetting earnings that were slightly above forecasts.

Asian stocks were mostly lower, tracking weakness in U.S. markets. China's Shanghai Composite Index edged up 0.2% after data showing foreign direct investment flows into the country rose more than expected. Japan's Nikkei Stock Average lost 1.2%, and Australia's S&P ASX 200 gave up 1.6%.

Gold rose 0.7%, to settle at $1,392 a troy ounce, while crude-oil prices climbed 1.2%, to settle at $87.73 a barrel. The dollar slipped against the euro and advanced versus the yen. The yield on the 10-year Treasury note fell to 1.685% as prices rose.

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